Cost Proportion Level

Cost Proportion within Margin Costing is a quality metric meant to indicate the level of accuracy to which parts have been counted. Three levels can be shown, each more secure than the last:

• Level 1: This first level signifies only a Naive Part Count has been used
• Level 2: This level shows both Smart Rack Proportions and a Naive Part Count have been used
• Level 3: This shows that both Smart Rack Proportions and Smart Part Proportions were used

Naive Part Count

• This is a basic cost count that is found by looking at the total cost of the work order
  • This is then divided by the amount of parts in that work order
• It is meant to count the cost of small work orders quickly

Smart Rack Proportions

• This is the other step that can be added to cost counting that measures looking at the amount of parts on each rack being used for the work order.
• It is helpful for work orders that require many racks.

Smart Part Proportions

• This improved style of cost counting looks at the details of each part
• In most cases it will give greater financial weight to parts that are bigger, are made of more expensive materials, and have undergone more treatments
• It will be most useful for Work Orders that have many parts that are very different

Level Readout

The readout for cost proportion level shown here becomes visible when the entries on the above Cost Per Station bar are selected: